The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 079 : Money Services

Subchapter 001 : GENERAL PROVISIONS

• § 2503. Definitions

  As used in this chapter:

  (1) “Authorized delegate” means a person a licensee designates to engage in money transmission on behalf of the licensee.

  (2) “Average daily money transmission liability” means the amount of the licensee’s outstanding money transmission obligations in this State at the end of each day in a given period of time, added together, and divided by the total number of days in the given period of time. For purposes of calculating average daily money transmission liability under this chapter for any licensee required to do so, the given periods of time shall be the quarters ending March 31, June 30, September 30, and December 31.

  (3) “Bank Secrecy Act” means the Bank Secrecy Act, 31 U.S.C. § 5311, et seq. and its implementing regulations, as may be amended.

  (4) “Check cashing” means receiving at least $500.00 compensation within a 30-day period for taking payment instruments or stored value, other than traveler’s checks, in exchange for money, payment instruments, or stored value delivered to the person delivering the payment instrument or stored value at the time and place of delivery without any agreement specifying when the person taking the payment instrument will present it for collection.

  (5) “Closed loop stored value” means stored value that is redeemable by the issuer only for goods or services provided by the issuer or its affiliate or franchisees of the issuer or its affiliate, except to the extent required by applicable law to be redeemable in cash for its cash value.

  (6) “Control of virtual currency,” when used in reference to a transaction or relationship involving virtual currency, means the power to execute unilaterally or prevent indefinitely a virtual currency transaction.

  (7) “Currency exchange” means receipt of revenues equal to or greater than five percent of total revenues from the exchange of money of one government for money of another government.

  (8) “Eligible rating” shall mean a credit rating of any of the three highest rating categories provided by an eligible rating service, whereby each category may include rating category modifiers such as “plus” or “minus” for S&P, or the equivalent for any other eligible rating service. Long-term credit ratings are deemed eligible if the rating is equal to A- or higher by S&P, or the equivalent from any other eligible rating service. Short-term credit ratings are deemed eligible if the rating is equal to or higher than A-2 or SP-2 by S&P, or the equivalent from any other eligible rating service. In the event that ratings differ among eligible rating services, the highest rating shall apply when determining whether a security bears an eligible rating.

  (9) “Eligible rating service” shall mean any Nationally Recognized Statistical Rating Organization (NRSRO) as defined by the U.S. Securities and Exchange Commission, and any other organization designated by the Commissioner by rule or order.

  (10) “In this State” means at a physical location within Vermont for a transaction requested in person. For a transaction requested electronically or by phone, the provider of money transmission may determine if the person requesting the transaction is “in this State” by relying on other information provided by the person regarding the location of the individual’s residential address or a business entity’s principal place of business or other physical address location, and any records associated with the person that the provider of money transmission may have to indicate such location, including an address associated with an account.

  (11) “Licensee” means a person licensed under this chapter.

  (12) “Limited station” means private premises where a check casher is authorized to engage in check cashing for not more than two days of each week solely for the employees of the particular employer or group of employers specified in the check casher license application.

  (13) “Mobile location” means a vehicle or a movable facility where check cashing occurs.

  (14) “Monetary value” means a medium of exchange, whether or not redeemable in money.

  (15) “Money” means a medium of exchange that is issued by the United States or a foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments.

  (16) “Money services” means money transmission, check cashing, or currency exchange.

  (17)(A) “Money transmission” means any of the following:

  (i) selling or issuing payment instruments to a person located in this State;

  (ii) selling or issuing stored value to a person located in this State; or

  (iii) receiving money for transmission from a person located in this State.

  (B) The term “money transmission” includes payroll processing services.

  (C) The term “money transmission” does not include the provision solely of telecommunications services or network access.

  (18) “Money transmission kiosk” means an automated, unstaffed electronic machine that allows users to engage in money transmission, including any machine that is capable of accepting or dispensing cash in exchange for virtual currency. The term does not include consumer cell phones and other similar personal devices.

  (19)(A) “Outstanding money transmission obligations” shall be established and extinguished in accordance with applicable state law and shall mean:

  (i) any payment instrument or stored value issued or sold by the licensee to a person located in the United States or reported as sold by an authorized delegate of the licensee to a person that is located in the United States that has not yet been paid or refunded by or for the licensee, or escheated in accordance with applicable abandoned property laws; or

  (ii) any money received for transmission by the licensee or an authorized delegate in the United States from a person located in the United States that has not been received by the payee or refunded to the sender, or escheated in accordance with applicable abandoned property laws.

  (B) For purposes of this section, “in the United States” shall include, to the extent applicable, a person in any state, territory, or possession of the United States; the District of Columbia; the Commonwealth of Puerto Rico; or a U.S. military installation located in a foreign country.

  (20) “Payment instrument” means a written or electronic check, draft, money order, traveler’s check, or other written or electronic instrument for the transmission or payment of money or monetary value, whether or not negotiable. The term does not include stored value or any instrument that is:

  (A) redeemable by the issuer only for goods or services provided by the issuer or its affiliate or franchisees of the issuer or its affiliate, except to the extent required by applicable law to be redeemable in cash for its cash value; or

  (B) not sold to the public but issued and distributed as part of a loyalty, rewards, or promotional program.

  (21) “Payroll processing services” means receiving money for transmission pursuant to a contract with a person to deliver wages or salaries, make payment of payroll taxes to state and federal agencies, make payments relating to employee benefit plans, or make distributions of other authorized deductions from wages or salaries. The term does not include an employer performing payroll processing services on its own behalf or on behalf of its affiliate.

  (22) “Prevailing market value” means the value to buy or sell a particular virtual currency, as applicable, quoted on a virtual currency exchange operated by a licensee based in the United States, with sufficient volume to reflect the prevailing market price of such virtual currency.

  (23) “Receiving money for transmission” or “money received for transmission” means receiving money or monetary value in the United States for transmission within or outside the United States by electronic or other means.

  (24) “Stored value” means monetary value representing a claim against the issuer evidenced by an electronic or digital record, and that is intended and accepted for use as a means of redemption for money or monetary value, or payment for goods or services. The term includes “prepaid access” as defined by 31 C.F.R. § 1010.100, as may be amended. Notwithstanding the foregoing, the term “stored value” does not include a payment instrument or closed loop stored value, or stored value not sold to the public but issued and distributed as part of a loyalty, rewards, or promotional program.

  (25) “Tangible net worth” means the aggregate assets of a licensee excluding all intangible assets, less liabilities, as determined in accordance with United States generally accepted accounting principles.

  (26) “U.S. dollar equivalent of virtual currency” means the prevailing market value of a particular virtual currency in United States dollars for a particular date or period specified in this chapter.

  (27)(A) “Virtual currency” means a digital representation of value that:

  (i) is used as a medium of exchange, unit of account, or store of value; and

  (ii) is not money, whether or not denominated in money.

  (B) The term “virtual currency” does not include:

  (i) a digital representation of value that can be redeemed for goods, services, discounts, or purchases solely as part of a customer affinity or rewards program with the issuing merchant or other designated merchants, or both, or can be redeemed for digital units in another customer affinity or rewards program, but cannot be, directly or indirectly, converted into, redeemed, or exchanged for money, monetary value, bank credit, or virtual currency; or

  (ii) a digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform, and:

  (I) has no market or application outside of such online game, game platform, or family of games;

  (II) cannot be, directly or indirectly, converted into, redeemed, or exchanged for money, monetary value, bank credit, or virtual currency; and

  (III) may or may not be redeemable for real-world goods, services, discounts, or purchases.

  (28) “Virtual-currency administration” means:

  (A) issuing virtual currency with the authority to redeem such virtual currency for money, monetary value, bank credit, or other virtual currency; or

  (B) issuing virtual currency that entitles the purchaser or holder of such virtual currency, or otherwise conveys or represents a right of the purchaser or holder of such virtual currency, to redeem such virtual currency for money, monetary value, bank credit, or other virtual currency.

  (29) “Virtual-currency business activity” means:

  (A) exchanging or transferring virtual currency, engaging in virtual-currency administration, or engaging in virtual-currency storage, in each case whether directly or through an agreement with a virtual-currency control-services vendor;

  (B) holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals;

  (C) buying or selling virtual currency as a consumer business; or

  (D) receiving virtual currency or control of virtual currency for transmission or transmitting virtual currency, except where the transaction is undertaken for nonfinancial purposes and does not involve the transfer of more than a nominal amount of virtual currency.

  (30) “Virtual-currency control-services vendor” means a person that has control of virtual currency solely under an agreement with a person that, on behalf of another person, assumes control of virtual currency.

  (31) “Virtual-currency kiosk operator” means a person that engages in virtual-currency business activity via a money transmission kiosk located in this State or a person that owns, operates, or manages a money transmission kiosk located in this State through which virtual-currency business activity is offered.

  (32) “Virtual-currency storage” means:

  (A) maintaining possession, custody, or control over virtual currency on behalf of another person, including as a virtual-currency control-services vendor;

  (B) issuing, transferring, or otherwise granting or providing to any person in this State any claim or right, or any physical, digital, or electronic instrument, receipt, certificate, or record representing any claim or right to receive, redeem, withdraw, transfer, exchange, or control any virtual currency or amount of virtual currency; or

  (C) receiving possession, custody, or control over virtual currency from a person in this State, in return for a promise or obligation to return, repay, exchange, or transfer such virtual currency or a like amount of such virtual currency. (Added 2023, No. 110 (Adj. Sess.), § 39, eff. July 1, 2024.)